Smuggling rife in Clark Freeport Zone

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First of three parts

SOME locators at the Clark Freeport Zone (CFZ) are being used in the smuggling of raw materials or finished products for export but usually end up in the local market.

Voluminous reports obtained by The Manila Times showed that the Clark Development Corporation’s (CDC) anti-smuggling task force has been apprehending some movers and confiscating items about to be smuggled out of the ecozone.

The most recent apprehensions by the Task Force on Revenue and Tax Monitoring led to the confiscation last November 9 of an undetermined number of cut gloves and five rolls of anti-static fabric, 19 boxes of sticky mats and three boxes of cotton M-3 wiper.


On June 17, the task force seized a truckload of computer servers and accessories after the driver presented only a gate pass from Rapat of Philexcel Business Park and not a permit to bring the items out of the zone.

Arnel Maguillo, chief of the anti-smuggling task force, reported at least 50 cases of interceptions and confiscations of goods about to be smuggled out of the zone between December 2004 and June this year.

The 50th entry of the group’s accomplishment report stated: “Secured all evidences regarding shipment of luxury cars (brand-new 2-door Gallardo Lamborghini worth $167,850 or P7.4 million) coming from Dubai via Subic and arrived at Clark Customs Clearance Area last Dec. 22, 2004. Submitted official report to the office of the president, task force chairman.”

The list of items that are being smuggled through Clark is long. It includes: DVDs from Malaysia; laptop computers declared as computer parts, untaxed imported furniture, cell phone parts (supposed to be shipped to Singapore); untaxed assorted cloth, rolls of textiles, wines, cigarettes and other duty-free items; crystal processing, grinding stones; assorted imitation watches; medicines; Tommy Hilfiger assorted colors of women’s jackets; scrap materials; wooden and steel chairs; diesel oil; medical equipment; halogen bulbs for cars; headphone sets; brand new electronic equipment; assorted fabrics and interlining fabrics.

Vehicles moving goods from the Freeport Zone must have a Bring Out Permit (BOP) from the CDC or they face a P50,000 fine, the arrest of the driver and confiscation of the cargo.

After paying the penalty, the vehicles are allowed to exit.

Under Republic Act 8748, which amended the Special Economic Zone Act of 1995, investors or locators in ecozones like CFZ cannot bring, much less sell, their products outside the ecozone.

Yet movers who were apprehended by the CDC’s Public Safety Department were found to be sourcing their items from the locators themselves and moving them outside either as raw materials or semi-processed or finished products, a violation of the Philippine Export Zone Authority law.

President Fidel V. Ramos created export zones to encourage foreign investors to locate in the Philippines. Locators enjoy a tax holiday for five years and later tax exemptions of up to five percent of their gross income paid and remitted.

The locators are mostly foreign-owned manufacturing firms, which by law are allowed to import raw materials and capital equipment for re-export to other foreign buyers.

But some locators import their raw materials and sell them in the local market.

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1 Comment

  1. Is the successor of Mr. Biazon tough enough for his appointed job, to run after these smugglers?, when found guilty, confiscate all his illegal properties and spend jail time in hard labor, in addition run after his cohorts and treat them the same.